Sierra Rutile Unveils Robust Definitive Feasibility Study Results For Sembehun

Sierra Rutile Holdings Ltd (ASX: SRX) has demonstrated robust results from a definitive feasibility study (DFS) for its Sembehun Project in Sierra Leone.

The DFS confirms that Sembehun is a globally significant Tier 1 natural rutile deposit and presents a commercially attractive development opportunity.

Sembehun has a total ore reserve of 173.7 million tonnes (Mt) at 1.46% rutile which includes a proved 110.6 Mt at 1.49%.

This translates to an expected mine life of 14 years, including ramp-up and tail periods.

175,000 tonnes annual rutile production

Natural rutile is the highest-grade form of naturally occurring titanium feedstock.

The DFS assumes an annual production rate of ~14.4 Mtpa ore mined to support an average of 175 ktpa rutile production at steady state.

Encouragingly, Sierra’s revised capex estimate for the project is US$301 million, a US$36 million reduction on the 2022 Preliminary Feasibility Study (PFS).

Further solidifying the project’s viability, payback is expected within 55 months with a post-tax, real net present value (NPV) of US$408 million.

Production and financial outcomes and economic assumptions – Sembehun.

Sierra Rutile Managing Director and CEO Theuns de Bruyn said: “The Sembehun DFS clearly demonstrates the significant value the Project holds, and the ability of Sembehun to fundamentally change the cost base and economics of mineral sands production by Sierra Rutile.”

Next steps

Sierra had started initial talks with potential financiers and off-takers in 2023 to ascertain appetite and likely debt sizing.

The DFS has demonstrated Sembehun’s value, with the NPV outlined by the study significantly more than the company’s current market cap.

This is relevant in the current situation where Sierra has received an unsolicited takeover offer, which it believes is “opportunistic, inadequate and undervalues the company.”

To secure Sembehun’s future, Sierra will resume talks with major development partners or strategic equity opportunities, and key industry participants.

Sierra had A$7.8 million in cash and no debt as at 31 December 2023.




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